Five years on from the seminal Kalifa Review, which assessed priority areas for the UK’s fintech sector, how has the sector progressed?

The Kalifa Review was commissioned in 2020 by the then Chancellor of the Exchequer, and now provides an opportunity for reflection on how far the UK’s fintech sector has come, and where further support may be needed.

Innovate Finance, the UK’s fintech trade body, has said that while the UK continues to be a thriving success story in the fintech world, the nation faces challenges from competing countries like the UAE and India.

Domestically, fintech has skyrocketed as a top industry; 60% of all SME lending across the UK is now being done by a fintech, while eight out of every 10 adults are using at least one fintech tool on a regular basis.

The trade body found that more than a quarter of UK fintechs are directly trying to address the issue of financial inequality, with the vast majority (97%) of all UK fintechs having a medium to very high positive impact on the UN Sustainable Development Goals.

Fintech was the subsector of financial services that saw the highest job creation back in 2024, and makes up the largest segment of the UK’s unicorn companies.

There has clearly been progress since the Kalifa review, spurred on by government policies.

These include the Government’s Modern Industrial Strategy, the cutting of red tape and regulations, the Financial Conduct Authority’s development of innovation services and sprints, and the passing of the Data (Use and Access) Act to bolster the use of smart data.

Still, Innovate Finance says that certain areas within fintech have been slow.

For instance, while the UK was early in delivering Open Banking, its arguable fallen behind Brazil and India in terms of delivering pay by bank in e-commerce and retail environments. Regulator work and actionable solutions to the market have yet to begin despite FCA sprints in that area.

While there has been progress in terms of technology and solutions, government strategy confusion has hampered progress on digital IDs, a similar issue seen in stablecoin development, where the Bank of England proposals have not been fully aligned for growth.

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Still, digitalisation and tokenisation remains a strong vector for opportunity, with Innovate Finance citing the UK-UK Transatlantic Task Force for Markets of the Future as a catalyst for progress.

The advent of AI, and the possibilities of agentic AI, have seen a revolution in most tech subsets; fintech will require regulations and framework to guide its implementation of these emerging tools.

Five years on from the Kalifa Review, Innovate Finance has identified new areas that need support for the next five years.

This includes tech positive regulation, stronger competition and resilience in banking and payments, the re-invigoration of capital markets, unlocking stablecoin opportunities, and leading in AI and data driven finnacial services.